Exhibit 10.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"), is made and entered
into as of July 18, 2006 by and among TC X Calibur, Inc., a Nevada
corporation ("ACQUIRER"), TCX ACQUISITION CORP., a Nevada corporation and
wholly-owned subsidiary of Acquirer ("SUB"), RE3W Worldwide Limited, a British
Virgin Islands corporation organized under the laws of the British Virgin
Islands ("RE3W"), and JENSON SERVICES, INC., DUANE S. JENSON, TRAVIS T. JENSON
and THOMAS J. HOWELLS each a SHAREHOLDER of Acquirer and collectively the
"ACQUIRER SHAREHOLDERS".
RECITALS
WHEREAS, Acquirer and Sub have determined that it is in the best
interests of their shareholders for Sub to merge with RE3W upon the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, the respective Boards of Directors of Acquirer, Sub and RE3W
have each approved this Agreement and the consummation of the transactions
contemplated hereby and approved the execution and delivery of this Agreement;
and
WHEREAS, for federal income tax purposes, it is intended that the merger
shall qualify as a reorganization under the provisions of Section 368a of the
Internal Revenue Code of 1986, as amended (the "CODE"); and
WHEREAS, certain capitalized terms used in this Agreement without
definition shall have the respective meanings given to them in Section 9.11.
NOW, THEREFOR, in consideration of the foregoing premises and
representations, warranties and agreements contained herein, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER.
(a) MERGER.
Upon the terms and conditions of this Agreement, at the Effective
Time (as defined herein), Sub, also referred to herein as the "Merging
Corporation," shall be merged with and into RE3W (the "MERGER") in accordance
with the provisions of the Nevada Revised Statutes (the "NRS") and the
International Business Companies Ordinance (CAP. 291) of the British Virgin
Islands(the "ACT") , the separate corporate existence of Sub shall cease and
RE3W shall continue as the surviving corporation (the "SURVIVING CORPORATION")
under the Act.
(b) EFFECTIVE TIME.
The Merger shall become effective upon the later of (i) the filing
and acceptance of Articles of Merger with the Secretary of State of the State
of Nevada (the "ARTICLES OF MERGER") in accordance with the provisions of
Section 92A.200 of the NRS; and (ii) the filing and acceptance of Articles of
Merger with the British Virgin Islands ("BVI") Registrar of Corporate Affairs
(the "BVI ARTICLES OF MERGER"). The date and time when the Merger shall become
effective is referred to herein as the "EFFECTIVE TIME." Between the Closing
(as that term is defined in Section 2.1 hereof) and the Effective Time, the
Parties will give effect to the Merger and agree, individually and
collectively, not to initiate or take any action contrary to this Agreement.
(c) MERGER EFFECTIVE.
At the Effective Time:
(i) RE3W shall continue its existence under the Act as the
Surviving Corporation;
(ii) the separate corporate existence of Sub shall cease;
(iii) all rights, title and interests to all assets,
whether tangible or intangible and any property or property rights owned by
Sub shall be allocated to and vested in the Surviving Corporation without
reversion or impairment, without further act or deed, and without any transfer
or assignment having occurred, but subject to any existing liens or other
Encumbrances thereon, and all liabilities and obligations of Sub shall be
allocated to the Surviving Corporation, which shall be the primary obligor
therefor and, except as otherwise provided by law or contract, no other party
to the Merger, other than the Surviving Corporation, shall be liable therefor;
and
(iv) Each of Sub and RE3W shall execute and deliver, and
file or cause to be filed with the Secretary of State of the State of Nevada
the Articles of Merger, and with the BVI Registrar of Corporate Affairs the
BVI Articles of Merger with such amendments thereto as the parties hereto
shall deem mutually acceptable.
(d) MEMORANDUM AND ARTICLES OF ASSOCIATION .
The Memorandum and Articles of Association of RE3W, as in effect
immediately prior to the Effective Time, shall be the Memorandum and Articles
of Association of the Surviving Corporation until thereafter amended as
provided therein or by applicable law.
(e) OFFICERS AND DIRECTORS OF SURVIVING CORPORATION.
The officers and directors of RE3W immediately prior to the
Effective Time shall be the officers and directors of the Surviving
Corporation, and each shall hold office in accordance with the Memorandum of
Association and Articles of Association of the Surviving Corporation until the
earlier of his or her resignation or removal or until his or her respective
successor is duly elected and qualified, as the case may be.
1.2 CONVERSION OF SECURITIES.
(a) At the Effective Time, by virtue of the Merger and without
any action on the part of Acquirer, Sub or RE3W or the holders of any of the
following securities:
(i) the common stock of RE3W, issued and outstanding as of
the Closing (the "COMMON SHARES"), shall be converted into and represent the
right to receive, and shall be exchangeable on a one for one basis for fully
paid and non-assessable shares of $0.001 par value common stock of Acquirer
("ACQUIRER COMMON STOCK") comprising a portion of the merger consideration set
forth in Section 1.3 hereafter (the "MERGER CONSIDERATION");
(ii) any Series A Preferred Shares of RE3W, issued and
outstanding as of the Closing (" SERIES A SHARES"), shall be converted into
and represent the right to receive, and shall be exchangeable on a one for one
basis for shares of Acquirer Common Stock comprising a portion of the Merger
Consideration as set forth in Section 1.3 hereafter;
(iii) any Series B Preferred Shares of RE3W, issued and
outstanding as of the Closing ("SERIES B SHARES"), shall be converted into and
represent the right to receive, and shall be exchangeable on a one for one
basis for shares of Acquirer Common Stock comprising a portion of the Merger
Consideration as set forth in Section 1.3 hereafter;
(iv) any Series C Preferred Shares of RE3W issued and
outstanding as of the Closing ("SERIES C SHARES"), shall be converted into and
represent the right to receive, and shall be exchangeable on a one for one
basis for shares of Acquirer Common Stock comprising a portion of the Merger
Consideration as set forth in Section 1.3 hereafter;
(v) any Series D Preferred Shares of RE3W, issued and
outstanding as of the Closing ("SERIES D SHARES"), shall be converted into and
represent the right to receive, and shall be exchangeable on a one for one
basis for shares of Acquirer Common Stock comprising a portion of the Merger
Consideration as set forth in Section 1.3 hereafter;
(vi) the Series E Preferred Shares of RE3W, issued and
outstanding as of the Closing ("SERIES E SHARES"), shall be converted into and
represent the right to receive, and shall be exchangeable on a one for one
basis for fully paid and non-assessable shares of $0.01 Series A Convertible
Preferred Stock of Acquirer ("ACQUIRER PREFERRED STOCK") comprising a portion
of the Merger Consideration as set forth in Section 1.3 hereafter;
(vii) each share of common stock, $1.00 par value per
share, of Sub, issued and outstanding as of the Closing, shall be converted
into and become one validly issued, fully paid and non-assessable share of
common stock of the Surviving Corporation.
(viii) each share of capital stock of RE3W, which term
includes collectively any Common Shares, Series A Shares, Series B Shares,
Series C Shares and Series D Shares(the "RE3W CAPITAL STOCK") held in
treasury, as of the Effective Time, shall, by virtue of the Merger, be
canceled without payment of any consideration therefor and without any
conversion thereof;
(ix) each share of RE3W Capital Stock and each Series E
Share outstanding as of the Effective Time (other than Dissenting Shares), by
virtue of the Merger, shall no longer be outstanding and shall automatically
be canceled and retired and shall cease to exist. From and after the Effective
Time, the holders of shares of RE3W Capital Stock and the Series E Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares except as otherwise provided herein or by
applicable law
(b) TRANSFER; DELIVERY OF CERTIFICATES AFTER EFFECTIVE TIME.
(i) From and after the Effective Time, there shall be no
transfers on the stock transfer books of RE3W of shares of RE3W Capital Stock
that were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates for shares of RE3W Capital Stock that were
outstanding immediately prior to the Effective Time, shall be delivered to
RE3W, they shall be canceled by the RE3W registered agent and exchanged for
the consideration to be received therefor in connection with the Merger as
provided in this Agreement. Certificates for Series A Shares, Series B Shares,
Series C Shares and Series D Shares that were converted to Common Shares prior
to the Closing shall be cancelled and the holders shall cease to have any
rights therein except to receive the portion of the Merger Consideration
designated in Section 1.2(a)(i). No delivery of certificates for Series E
Shares shall be required to be made by any holder thereof as a requirement to
receive certificates for Acquirer Preferred Stock; and in the absence of
certificates for Series E Shares, RE3W may deliver script which will entitle
the holders to the portion of the Merger Consideration referred to in Section
1.2(a)(vi).
(ii) As soon as practicable after the Effective Time, RE3W
shall send to each Person who shall have been, at the Effective Time, a holder
of record of certificates which represented outstanding RE3W Capital Stock
(the "Certificates"), which shares were converted into the right to receive
Acquirer Common Stock pursuant to Section 1.2(a) (a "Holder"), a letter of
transmittal which shall specify that the contemplated transaction between the
parties hereto has occurred and that such Person is entitled to shares of
Acquirer Common Stock. Such letter shall also contain instructions for use in
obtaining the certificates representing the Acquirer Common Stock. Upon
providing Acquirer with such letter of transmittal duly executed and such
other documents as Acquirer may reasonably require, such Holder shall be
entitled to receive in exchange therefor a certificate representing the number
of shares of Acquirer Common Stock into which the applicable portion of RE3W
Capital Stock shall have been converted at the Effective Time. Until Acquirer
receives the documents and information as contemplated by this Section 1.2(b),
each holder of RE3W Capital Stock shall be deemed to have only the right to
receive the number of shares of Acquirer Common Stock into which their RE3W
Capital Stock shall have been converted. If any certificate representing
Acquirer Common Stock is to be issued to any Person other than the Holder, it
shall be a condition to such exchange that such Person either (i) shall pay to
Acquirer any transfer or other taxes required as a result of the issuance of
such certificates of Acquirer Common Stock and the distribution of such cash
payment to such Person or (ii) shall establish to the satisfaction of Acquirer
that such tax has been paid or is not applicable.
(iii) RE3W and Acquirer shall each seek an exemption for
the exchanges described in Section 1.2(a) if available, and if not, shall
mutually undertake any and all required action to comply with any notification
or registration requirements of the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder (the "SECURITIES ACT").
(c) CONVERSION OF OUTSTANDING WARRANTS. As of the date of this
Agreement, as set forth on Schedule 1.3(b), there are currently outstanding
warrants to purchase an aggregate of 160,000 RE3W Common Shares that were
issued to holders of RE3W Bridge Notes, as defined below, (collectively, the
"BRIDGE WARRANTS"). At the Effective Time, holders of the Bridge Warrants (the
"BRIDGE WARRANT HOLDERS") shall be entitled to receive, in exchange therefor,
warrants (the "ACQUIRER WARRANTS") to purchase an equal number of shares of
Acquirer Common Stock, substantially on the terms of the form of the warrant
attached hereto as Exhibit 1.2(c)(i). Prior to the Closing, RE3W will issue
and deliver up to 1,200,000 warrants, (each warrant entitling the holder
thereof to purchase one Common Share and, further, each such warrant, together
with five Series E Shares, comprise one Unit from among the 1,200,000 Units
offered by RE3W in an Offering which is described in Section 4.1(d) hereof
(the "SERIES E WARRANTS")). At the Effective Time, holders of the Series E
Warrants shall be entitled to receive, in exchange therefor, warrants (the
"SERIES A ACQUIRER WARRANTS") to purchase an equal number of shares of
Acquirer Common Stock, substantially on the terms of the form of warrant
attached hereto as Exhibit 1.2(c)(ii). Immediately prior to the Effective
Time, each Bridge Warrant Holder shall surrender to Acquirer for cancellation
all certificates or agreements evidencing a Bridge Warrant and receive in
exchange therefor the Acquirer Warrants. Immediately prior to the Effective
Time, each Series E Warrant Holder will surrender to Acquirer for cancellation
any certificates or script that evidence a Series E Warrant for cancellation
and deliver to Acquirer a duly executed stock assignment that assigns all
rights of the Series E Warrant Holder to Acquirer and receive in exchange
therefor the Series A Acquirer Warrants.
(d) CONVERSION OF OUTSTANDING OPTIONS. As of the date of this
Agreement, as set forth on Schedule 1.3(b), there are currently outstanding
options to purchase an aggregate of 510,000 Common Shares (collectively, the
"RE3W OPTIONS"). At the Effective Time, holders of the RE3W Options (the "RE3W
OPTION HOLDERS") shall be entitled to receive, in exchange therefor, options
(the "ACQUIRER OPTIONS") to purchase shares of Acquirer Common Stock,
substantially on the terms of the Form of Option attached hereto as Exhibit
1.2(d). Immediately prior to the Effective Time, each RE3W Option Holder shall
surrender to Acquirer for cancellation all certificates or agreements
evidencing a RE3W Option and receive in exchange therefor the Acquirer
Options.
(e) CONVERSION OF BRIDGE LOAN NOTES. As of the date of this
Agreement, as set forth on Schedule 1.3(b), there are currently outstanding
Bridge Loan Notes that are convertible into Common Shares (collectively, the
"RE3W BRIDGE NOTES"). At the Effective Time, holders of the RE3W Bridge Notes
(the "RE3W NOTE HOLDERS") shall be entitled to receive, in exchange therefor,
(the "ACQUIRER BRIDGE NOTES"); together with the Acquirer Common Stock,
Acquirer Series A Shares, Acquirer Warrants, Acquirer Series A Warrants and
Acquirer Options (collectively the "ACQUIRER SECURITIES"). The Acquirer Bridge
Notes shall be convertible into shares of Acquirer Common Stock, substantially
on the terms of the Form of RE3W Bridge Notes attached hereto as Exhibit
1.2(e). Immediately prior to the Effective Time, each RE3W Note Holder shall
assign and deliver to Acquirer all RE3W Bridge Notes and receive in exchange
therefor the Acquirer Bridge Notes.
(f) DISSENTERS RIGHTS. Notwithstanding any provision of this
Agreement to the contrary, shares of RE3W Capital Stock that are outstanding
immediately prior to the Effective Time and which are held of record by
stockholders who have not voted in favor of the Merger or consented thereto in
writing and have demanded properly in writing appraisal for such shares in
accordance with Article 83 of the Act (collectively, the "Dissenting Shares")
shall not be converted into or represent the right to receive the Merger
Consideration set forth in Section 1.3. Such stockholders shall be entitled
to receive such consideration as is determined to be due with respect to such
Dissenting Shares in accordance with the provisions of the Act, except that
all Dissenting Shares held by stockholders who shall have failed to perfect or
who effectively shall have withdrawn or lost their rights to appraisal of such
shares under applicable provisions of the Act, shall thereupon be deemed to
have been converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the shares of Acquirer Common Stock
specified in Section 1.2(a), without any interest thereon, upon surrender, in
the manner provided in Section 1.2(b). RE3W shall give Acquirer (i) prompt
notice of any demands for appraisal received by RE3W, withdrawals of such
demands, and any other instruments served pursuant to the Act and received by
RE3W and (ii) the opportunity to direct and control all negotiations and
proceedings with respect to demands for appraisal under the Act. RE3W shall
not, except with the prior written consent of Acquirer, offer to settle any
such appraisal demands
1.3 MERGER CONSIDERATION.
(a) Subject to the provisions of Section 1.4 hereafter, the
Merger Consideration, consisting of the total purchase price payable to the
holders of one hundred percent (100%) of the outstanding RE3W Capital Stock
and the Series E Shares (collectively, the "RE3W SHAREHOLDERS") in connection
with the acquisition of RE3W by the Merger, shall consist of newly issued
shares of Acquirer Common Stock; provided, however, that the holders of Series
E Shares shall receive Merger Consideration in the form of Acquirer Preferred
Stock as provided in Section 1.2(a)(vi).
(b) The Merger Consideration shall be allocated at Closing among
the RE3W Shareholders in the proportion of their share ownership of the
outstanding shares of RE3W Capital Stock and Series E Shares at the Effective
Time as set forth on Schedule 1.3(b). It is intended that the delivery of the
Merger Consideration shall qualify as a tax-free exchange under the Code.
(c) The Acquirer Common Stock and Acquirer Preferred Stock to
be delivered at the Effective Time shall be fully paid and non-assessable and
shall be free and clear of all liens, levies and Encumbrances except that such
shares shall be "restricted securities" as this term is defined in the
Securities Act.
1.4 ADDITIONAL RIGHTS; TAKING OF NECESSARY ACTION; FURTHER ACTION.
Each of Acquirer, RE3W and Sub shall use their best efforts to
take all such action as may be necessary and appropriate to effectuate the
Merger under the laws of the BVI and the NRS as promptly as possible,
including, without limitation, the filing of Articles of Merger in Nevada and
in the BVI consistent with the terms of this Agreement. If at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement, the officers of such corporations are fully
authorized in the name of their corporations or otherwise, and notwithstanding
the Merger, to take, and shall take, all lawful and necessary action.
ARTICLE II
THE CLOSING
2.1 CLOSING DATE.
Subject to satisfaction or waiver of all conditions precedent set
forth in Article VI of this Agreement, the closing of the Merger (the
"CLOSING") shall take place at the offices of Stephan, Oringher, Richman,
Theodora & Miller P.C., at 10:00 a.m., local time on the second Business Day
after which (i) all appropriate Acquirer, Sub and RE3W corporate action has
been taken in accordance with Article III of this Agreement, (ii) each of
Acquirer, Sub, RE3W and the Acquirer Shareholders are prepared to effect and
complete the closing transactions under Section 2.2 and (iii) the last of the
conditions precedent set forth in Article VI of this Agreement is fulfilled or
waived or at such other time, date and place as the Parties may mutually
agree. The foregoing notwithstanding, the Parties will use their best efforts
to effectuate the Closing not later than August 31, 2006. Anything in this
Article II to the contrary notwithstanding, deliveries of the Merger
Consideration at the Closing will not be effective until the Effective Time.
2.2 CLOSING TRANSACTIONS.
At the Closing, the following transactions shall occur, all of
such transactions being deemed to occur simultaneously:
(a) RE3W DELIVERIES
RE3W shall deliver, or cause to be delivered, to Acquirer
and Sub, the following documents and shall take the following actions:
(i) Certificates, if any, representing all of the issued
and outstanding shares of RE3W Capital Stock, or in lieu thereof, documents of
assignment thereof in form and content reasonably satisfactory to Acquirer;
(ii) Certificates or script, if any, representing all of
the Units (or the Series E Shares and Series E Warrants separately) or in lieu
thereof, documents of assignment in form and content reasonably satisfactory
to Acquirer ;
(iii) The form of the Letter of Transmittal that RE3W
intends to deliver to each Holder pursuant to Section 1.2(b)(ii), attached as
Exhibit 2.2(a)(iii) hereto.
(iv) The Bridge Warrants and any certificates or agreements
evidencing the Bridge Warrants for cancellation in accordance with Section
1.2(c) hereof;
(v) The RE3W Options and any certificates or agreements
evidencing the RE3W Options for cancellation in accordance with Section 1.2(d)
hereof;
(vi) The RE3W Bridge Notes and any certificates or
agreements evidencing the RE3W Bridge Notes for cancellation in accordance
with Section 1.2(e) hereof;
(vii) A certificate executed by an authorized officer of
RE3W to the effect that all representations and warranties made by RE3W in
this Agreement are true and correct on and as of the Closing, as though
originally given to Acquirer and Sub on said date;
(viii) An incumbency certificate signed by all of the
officers of RE3W dated at or about the Closing;
(ix) Copy of RE3W's Memorandum and Articles of Association,
as amended, in effect as of the Closing, certified by the Registered Agent of
RE3W shall be delivered by RE3W (the "Memorandum and Articles");
(x) Board resolution dated at or about the Closing
authorizing the transactions contemplated by this Agreement (as defined in
Section 3.1(a) certified by the Secretary of RE3W;
(xi) Certificate of the Secretary of RE3W to the effect
that this Agreement and the Merger has been approved by written consent of
holders of the requisite number of RE3W's Capital Stock; and
(xii) Certificate of the Secretary of RE3W to the effect
that (x) the Private Placement has closed, and (y) the Series E Shares the
Series E Warrants comprising the Units have been issued.
(b) ACQUIRER DELIVERIES
Acquirer will deliver, or shall cause to be delivered, to RE3W,
the RE3W Warrant Holders, the RE3W Option Holders and the RE3W Shareholders,
as applicable, the following documents and shall take the following actions:
(i) Acquirer shall deliver or shall cause to be delivered
to the RE3W Shareholders certificates evidencing shares of Acquirer Common
Stock and certificates evidencing shares of Acquirer Preferred Stock in
payment of the Merger Consideration in accordance with Section 1.3(b) and as
set forth in Schedule 3.1;
(ii) Acquirer shall deliver to the holders of outstanding
shares of capital stock of RE3W, Inc., pro rata, in proportion to their
respective ownership of said corporation's outstanding shares (the
"Contributed Shares"), 12,000 fully paid and non-assessable shares of
Acquirer's Common Stock in consideration for the contribution of the
Contributed Shares pursuant to the terms of a Contribution Agreement among
said RE3W, Inc. shareholders and Acquirer;
(iii) Acquirer shall deliver or cause to be delivered to
the Bridge Warrant Holders and the Series E Warrant Holders, the Acquirer
Warrants and the Series A Acquirer Warrants, respectively in accordance with
Section 1.2(c) and as set forth in Schedule 3.1 in the forms attached as
Exhibits 1.2(c)(iii)(a) and 1.2(c)(iii)(b), respectively;
(iv) Acquirer shall deliver or cause to be delivered to the
RE3W Option Holders, the Acquirer Options in accordance with Section 1.2(d) in
the form attached as Exhibit 1.2(d);
(v) Acquirer shall deliver or cause to be delivered to the
RE3W Bridge Note Holders, the Acquirer Bridge Notes in accordance with Section
1.2(e);
(vi) A certificate executed by an authorized officer of
Acquirer to the effect that all representations and warranties of Acquirer
under this Agreement are true and correct as of the Closing, as though
originally given to RE3W on said date;
(vii) A certificate executed by an authorized officer of
Sub to the effect that all representations and warranties of Sub under this
Agreement are true and correct as of the Closing, as though originally given
to RE3W and the RE3W Shareholders on said date;
(viii) A certificate of good standing from the Secretary of
State of the State of Nevada dated at or about the Closing that Acquirer is in
good standing under the laws of said state;
(ix) A certificate of good standing from the Secretary of
State of the State of Nevada dated at or about the Closing that Sub is in good
standing under the laws of said state;
(x) An incumbency certificate signed by all of the
officers of Acquirer dated at or about the Closing;
(xi) An incumbency certificate signed by all of the
officers of Sub dated at or about the Closing;
(xii) An Amended and Restated Articles of Incorporation of
Acquirer in the form of Exhibit 2.2(b)(xii)(a) hereto, certified by the
Secretary of State of the State of Nevada at or about the Closing Date (the
"Restated Articles") and a copy of the Restated Bylaws of Acquirer in the form
of Exhibit 2.2(b)(xii)(b), certified by the Secretary of Acquirer dated at or
about the Closing;
(xiii) A certificate of the Secretary of Acquirer to the
effect that the Restated Bylaws of Acquirer in the form of Exhibit
2.2(b)(xii)(b) were approved by Acquirer's Board and the holders of a majority
of Acquirer's outstanding shares of Common Stock;
(xiv) Certificate of Incorporation of Sub certified by the
Secretary of State of the State of Nevada at or about the Closing Date and a
copy of the Bylaws of Sub certified by the Secretary of Sub dated at or about
the Closing;
(xv) Board resolution of Acquirer dated at or about the
Closing authorizing the transactions contemplated by this Agreement certified
by the Secretary of Acquirer;
(xvi) Board and shareholder resolutions of Sub dated at or
about the Closing authorizing the transactions contemplated by this Agreement
certified by the Secretary of Sub;
(xvii) A Certificate of the Secretary of Acquirer to the
effect that the Board and the holders of a majority of Acquirer's outstanding
shares of Common Stock have approved a 2006 Stock Option Plan in the form set
forth in Exhibit 2.2(b)(xvii) hereto; and
(xviii) A Certificate of the Secretary of Acquirer to the
effect that Acquirer has assumed the obligations of RE3W under all
registration rights agreements entered into by RE3W at or prior to the Closing
Date.
(c) ACQUIRER SHAREHOLDER ACTIONS AND DELIVERIES.
The Acquirer Shareholders shall take the following action:
(i) Certain of the Acquirer Shareholders shall deliver to
RE3W an Indemnification Agreement in the form of Exhibit 2.2(c)(i) hereto;
(ii) deliver to Acquirer and RE3W the Lock-Up/Leak-Out
Agreement in the form of Exhibit 5.4(c); and
(iii) execute and deliver to RE3W or to Acquirer for
delivery to RE3W all consents and certificates required by Section 3.2 hereof.
(d) ADDITIONAL ACTIONS AND DELIVERIES.
Each of the parties to this Agreement shall have otherwise
executed whatever documents and agreements, provided whatever consents or
approvals and shall have taken all such actions as are required under this
Agreement.
ARTICLE III
CERTAIN CORPORATE ACTION
3.1 RE3W CORPORATE ACTION; RE3W SHAREHOLDER CONSENT.
(a) On or before the Closing, holders representing more than 50%
of the votes of the outstanding RE3W Capital Stock (including the affirmative
vote or written consent of the holders of a majority of the Series A Shares,
Series B Shares, Series C Shares and Series D Shares (collectively the "RE3W
Preferred Stock") voting as a class) and a majority of the Series E Shares,
voting as a separate class, will have approved this Agreement and the Merger
by vote or written consent in the manner provided under the Act and the
Amended Memorandum and Articles.
(b) RE3W shall cause to occur all other corporate action
necessary to effect the Merger and to consummate the other transactions
contemplated hereby.
3.2 ACQUIRER AND SUB CORPORATE ACTION; ACQUIRER SHAREHOLDER CONSENT.
(a) Prior to the Closing, holders representing more than 50% of
the outstanding Common Stock of Acquirer will have approved, separately or
together, (i) the Restated Articles and Acquirer shall have filed same with
the office of the Secretary of State of Nevada, (ii) the Restated Bylaws of
Acquirer and (iii) the 2006 Stock Option Plan in the form of Exhibit
2.2(b)(xvii).
(b) Acquirer, as the holder of all of Sub's outstanding shares
of capital stock, will have voted said shares in favor of the Merger.
(c) Acquirer and Sub shall cause to occur all other corporate
action necessary to effect the Merger and to consummate the other transactions
contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF RE3W.
As a material inducement to Acquirer and Sub to execute this
Agreement and consummate the Merger and other transactions contemplated
hereby, RE3W hereby makes the following representations and warranties to
Acquirer and Sub. The representations and warranties are true and correct in
all material respects at this date, and will be true and correct in all
material respects on the Closing as though made on and as of such date.
(a) CORPORATE EXISTENCE AND POWER.
(i) RE3W is a corporation duly incorporated, validly
existing and in good standing under the laws of the BVI, and has all corporate
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except where the failure
to have any of the foregoing would not have a Material Adverse Effect. RE3W
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect.
True, correct and complete copies of the Memorandum of Association and the
Articles of Association of RE3W, in effect as of the date of this Agreement,
are attached hereto together as Schedule 4.1(a) and are made a part hereof.
(ii) RE3W has a wholly owned subsidiary in Bermuda, RE3W,
Ltd., which is operated solely for purposes of maintaining its principal
executive office in Bermuda (the "SUBSIDIARY"). RE3W owns no interest in any
other entity.
(b) DUE AUTHORIZATION AND REQUISITE APPROVALS.
(i) This Agreement has been duly authorized, executed and
delivered by RE3W and constitutes a valid and binding agreement of RE3W
enforceable in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, moratorium, and other similar
laws relating to, limiting or affecting the enforcement of creditors rights
generally or by the application of equitable principles. As of the Closing
all corporate action on the part of RE3W required under applicable law, its
Amended Memorandum and its Amended Articles in order to consummate the Merger
will have occurred.
(ii) The Board of Directors of RE3W has approved the
execution of this Agreement and the consummation of the Merger and all other
transactions contemplated hereby. At the Closing, the RE3W Shareholders will
have approved the execution of this Agreement and the consummation of the
Merger and all other transactions contemplated hereby in the manner set forth
in Section 3.1(a).
(c) NO CONTRAVENTION.
The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not: (i) conflict
with or result in any violation of any provision of the Memorandum and
Articles, and when effective, the Amended Memorandum and Amended Articles; or
(ii) conflict with or result in any violation or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of a right or obligation or loss
under, any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to RE3W
or any of its properties or assets, or result in the creation or imposition of
any mortgage, lien, pledge, charge or security interest of any kind
("ENCUMBRANCE") of RE3W, except such as is not reasonably likely to have a
Material Adverse Effect or prevent RE3W from consummating the transactions
contemplated by this Agreement. Except as set forth on Schedule 4.1(c), no
consent, approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, is required by
or with respect to RE3W in connection with the execution and delivery of this
Agreement by RE3W or the consummation by RE3W of the transactions contemplated
hereby, except the filing of the BVI Articles of Merger.
(d) PRIVATE PLACEMENT MEMORANDUM
The information set forth on the pages in a Confidential Private
Placement Memorandum dated June 21, 2006 (the "PPM") that correspond to each
of the captions in the Table of Contents of the PPM, is true and correct in
all material respects as stated therein. When amended after the date hereof by
a supplement, the information on the pages in the supplemented PPM that
correspond to each of the captions in the Table of Contents therein, shall be
true and correct in all material respects as stated therein. The supplemented
PPM will be provided to prospective investors in an exempt offering of Units
by RE3W (the "OFFERING"). A true and correct copy of the PPM is attached as
Schedule 4.1(d) hereto. Upon completion of the supplemented PPM, a true and
correct copy thereof will be attached to supplement Schedule 4.1(d).
(e) CAPITALIZATION AND SHARE OWNERSHIP.
The authorized capitalization of RE3W is as set forth in the PPM.
Except as set forth in the PPM or on Schedule 1.3(b), there are outstanding
(i) no shares of capital stock or other voting securities of RE3W, (ii) no
securities of RE3W convertible into or exchangeable for shares of capital
stock or voting securities of RE3W and (iii) no options, warrants or other
rights to acquire from RE3W, the RE3W Shareholders, or any other Person, and
no obligation of RE3W to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of RE3W, and there are no agreements or commitments to do any of
the foregoing. There are no voting trusts or voting agreements applicable to
any shares of capital stock of RE3W. Prior to the Closing, RE3W expects to
issue between 640,000 Units and a maximum of 1,200,000 Units (each Unit
consisting of five Series E Shares and one Series E Warrant) to Accredited
Investors who purchase Units in the Offering. The Series E Shares and Series
E Warrants, when issued and delivered, will be as described in the PPM. The
RE3W Capital Stock to be surrendered in the Merger will be owned of record and
beneficially by the shareholders identified on Schedule 1.3(b), free and clear
of any Encumbrances or Rights. There are no agreements (other than this
Agreement) to sell, pledge, assign or otherwise transfer such securities.
(f) GAAP FINANCIAL STATEMENTS.
The financial statements that are set forth as Exhibit A to the
PPM (the "Financial Statements") have been prepared from, and are in
accordance with, the books and records of RE3W, comply in all material
respects with applicable accounting requirements, have been prepared in
accordance with United States generally accepted accounting principles
consistently applied ("GAAP") throughout the periods reported upon and fairly
present in all material respects the financial position of RE3W and Subsidiary
as of the dates thereof and the results of operations and cash flows of RE3W
and Subsidiary for the periods then ended.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as and to the extent set forth on the Financial Statements
and elsewhere in the PPM, to the extent contained in this Agreement, or as set
forth on Schedule 4.1(g), between March 31, 2006 (the date of the most recent
Financial Statements) and the Closing, there will not be (i) any material
adverse change in the business, assets, properties, results of operations,
financial condition or prospects of RE3W; (ii) any entry by RE3W into any
material commitment or transaction which is not in the ordinary course of
business; (iii) any change by RE3W in accounting principles or methods except
insofar as may be required by a change in generally accepted accounting
principles; (iv) any declaration, payment or setting aside for payment of any
dividends or other distributions (whether in cash, stock or property) in
respect of RE3W Capital Stock, or any direct or indirect redemption, purchase
or any other type of acquisition by RE3W, or any direct or indirect
redemption, purchase or any other type of acquisition by RE3W of any shares of
its capital stock or any other securities for an aggregate sum not in excess
of $10,000; (v) any agreement by RE3W, whether in writing or otherwise, to
take any action which, if taken prior to the date of this Agreement, would
have made any representation or warranty in this Section 4.1 untrue or
incorrect; (vi) any acquisition of the assets of RE3W, other than in the
ordinary course of business and consistent with past practice and not in
excess of $25,000 in the aggregate; or (vii) any execution of any agreement
with any Person who serves as an executive officer of RE3W providing for his
or her employment, or any increase in the compensation or in severance or
termination benefits payable or to become payable by RE3W or RE3W, Inc., to
any officer or key employee, or any material increase in benefits under any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, insurance or
other plan or arrangement or understanding (whether or not legally binding)
providing benefits to any present or former employee of RE3W or RE3W, Inc.
Since the date of the Financial Statements, there has not been and there is
not threatened, any change in financial condition, business, results of
operations or prospects of the business or any material physical damage or
loss to any of the properties or assets of the business or to the premises
occupied in connection with the business, whether or not such loss is covered
by insurance or which would constitute a Material Adverse Event.
(h) INVESTMENT INTENT.
The Acquirer Securities to be issued in exchange for the RE3W
Capital Stock, the Series E Shares, the Series E Warrants, the Bridge Warrants
and the Bridge Notes (collectively the "RE3W SECURITIES") pursuant to this
Agreement are not being registered under the Securities Act on the basis of
the statutory exemption provided by Section 4(2) thereof and Rule 506 of
Regulation D promulgated thereunder, relating to transactions not involving a
public offering. To the Knowledge of RE3W fewer than 35 holders of RE3W
Securities are not Accredited Investors.
(i) INVESTMENT BANKING FEES.
Except as set forth in the PPM, there is no investment banker,
broker, finder or other similar intermediary which has been retained by, or is
authorized by RE3W to act on its or their behalf, who might be entitled to any
fee or commission from RE3W, Acquirer, Sub or any of their respective
affiliates upon consummation of this Merger.
(j) STATEMENTS AND OTHER DOCUMENTS NOT MISLEADING.
Neither this Agreement, including all exhibits and schedules and
other closing documents, nor any other financial statement, document or other
instrument heretofore or hereafter furnished by RE3W to Acquirer or Sub in
connection with the Merger or the other transactions contemplated hereby,
contains or will contain any untrue statement of any material fact or omit or
will omit to state any material fact required to be stated in order to make
such statement, information, document or other instruments, in light of the
circumstances in which they are made, not misleading. Except to the extent
set forth in the PPM, there is no fact known to RE3W which may have a Material
Adverse Effect on the business, prospects, financial condition or results of
operations of RE3W or of any of its properties or assets which has not been
set forth in this Agreement as an exhibit or schedule hereto or disclosed by
RE3W to the Acquirer prior to the execution of this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES OF ACQUIRER AND SUB.
As a material inducement to RE3W to execute this Agreement and to
consummate the Merger and the other transactions contemplated hereby, Acquirer
and Sub, hereby jointly and severally, make the following representations and
warranties:
(a) CORPORATE EXISTENCE AND POWER.
(i) Acquirer is duly organized, validly existing and in
good standing under the laws of Nevada, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted, except where the failure to be or have
any of the foregoing would not have a Material Adverse Effect. Acquirer is
duly qualified as a foreign corporation or other entity to do business and is
in good standing in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary, except for such failures to be so qualified or in
good standing as would not have a Material Adverse Effect.
(ii) Sub is the only subsidiary of Acquirer. Sub is duly
organized, validly existing and in good standing under the laws of Nevada,
with the corporate power and authority to own and operate its businesses as
presently conducted, except where the failure to be or have any of the
foregoing would not have a Material Adverse Effect. Sub is duly qualified as a
foreign company or other entity to do business and is in good standing in each
jurisdiction where the character of its properties owned or held under lease
or the nature of its activities makes such qualification necessary, except for
such failures to be so qualified or in good standing as would not,
individually or in the aggregate, have a Material Adverse Effect. True,
correct and complete copies of the Articles of Incorporation and Bylaws, or
similar organizational documents, of Sub, as amended to date, are attached
hereto as Schedule 4.2(a)(ii) and are made a part hereof.
(b) DUE AUTHORIZATION.
This Agreement, and as of the Closing the other agreements
described herein to which Acquirer or Sub is a party, has been, or as of the
Closing will be, duly authorized, executed and delivered by Acquirer or Sub,
as applicable, and constitutes, or as of the Closing will constitute, a valid
and binding agreement of Acquirer or Sub, as applicable, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium, and other similar laws relating
to, limiting or affecting the enforcement of creditors rights generally or by
the application of equitable principles. As of the Closing all corporate
action on the part of Acquirer and Sub required under applicable law in order
to consummate the Merger will have occurred.
(c) NO CONTRAVENTION.
The execution and delivery of the Agreement does not, and the
consummation of the transactions contemplated hereby will not (i) conflict
with or result in any violation of any provision of the Articles of
Incorporation or Bylaws of Acquirer or Sub or (ii) conflict with or result in
any violation or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any right or obligation or to a loss or a benefit under, any provision of the
Articles of Incorporation or Bylaws of Acquirer or Sub or any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Acquirer or Sub or
their properties or assets or result in the creation or imposition of any
Encumbrance on any asset of Acquirer or Sub, except, only as to clause (ii)
above, such as is not reasonably likely to have a Material Adverse Effect or
prevent Acquirer or Sub from consummating the transactions contemplated by
this Agreement. Except as set forth in Schedule 4.2(c), no consent, approval,
order or authorization of, or registration, declaration or filing with, any
Person, any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, is required by or with
respect to Acquirer or Sub in connection with the execution and delivery of
this Agreement or the consummation by them of the transactions contemplated
hereby, except the filing of the Articles of Merger.
(d) CAPITALIZATION.
(i) The authorized capital stock of Acquirer consists of
50,000,000 shares of common stock, $.001 par value per share ("Common Stock")
and 5,000,000 shares of preferred stock, $0.001 par value per share. The
outstanding capital stock of the Acquirer consists solely of 2,213,623 shares
of Common Stock. No shares of preferred stock have been issued or are
outstanding. All shares of capital stock of Acquirer outstanding have been
duly authorized and validly issued, are fully paid and non-assessable and are
free of preemptive rights. Except as provided in this Section 4.2(d)(i), there
are currently outstanding (A) no shares of capital stock or other voting
securities of Acquirer, (B) no securities of Acquirer convertible into or
exchangeable for shares of capital stock or voting securities of Acquirer and
(C) no options, warrants or other rights to acquire shares of capital stock
from Acquirer or any other Person, and no obligation of Acquirer to issue, any
capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Acquirer, and there are
no agreements or commitments to do any of the foregoing. There are no voting
trusts or voting agreements applicable to any shares of capital stock of
Acquirer. There are no agreements (other than this Agreement) to sell,
pledge, assign or otherwise transfer such securities. Prior to the Closing,
Acquirer will approve and recommend that the holders of a majority of the
outstanding shares of Common Stock consent to the adoption of a 2006 Stock
Option Plan the be effective upon consummation of the Merger.
(ii) The authorized capital stock of Sub consists solely of
1,000 shares of common stock, $1.00 par value per share, all of which shares
are issued and outstanding and owned of record and beneficially by Acquirer.
The outstanding shares of Sub have been duly authorized and validly issued,
and are fully paid and non-assessable and free of preemptive rights.
(e) SEC REPORTS AND FINANCIAL STATEMENTS.
Acquirer has filed with the SEC, and has heretofore made available
to RE3W true and complete copies of, all forms, reports, schedules, statements
and other documents required to be filed by it under the Exchange Act or the
Securities Act, including the Form 10-KSB Annual Report for the fiscal year
ended December 31, 2005, as filed with the SEC on March 23, 2006 (as such
documents have been amended since the time of their filing, collectively, the
"Acquirer SEC Documents"). As of their respective dates or, if amended, as of
the date of the last such amendment, the Acquirer SEC Documents, including any
financial statements or schedules included therein (i) did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be,
and the applicable rules and regulations of the SEC thereunder. Each of the
financial statements included in the Acquirer SEC Documents have been prepared
from, and are in accordance with, the books and records of Acquirer, comply in
all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the financial positions and the results of operations and cash flows
of Acquirer as of the dates thereof or for the periods presented therein
(subject, in the case of unaudited statements, to normal year-end audit
adjustments not material in amount).
(f) ASSETS.
Acquirer does not own or have any leasehold interest in any real
property. Acquirer has good and marketable title to or the legal right to use,
and holds free and clear of all Encumbrances, all of the assets reflected in
the most recent financial statements contained in the Acquirer SEC Documents,
except for those sold or otherwise disposed of since the date of such
financial statements in the ordinary course of business consistent with past
practice and not in violation of this Agreement. On the Closing Date, Acquirer
will have no assets and no liabilities of any kind, whether direct or
contingent.
(g) LITIGATION.
There is no action, suit, investigation or proceeding (or, to the
Knowledge of Acquirer or Sub any basis therefor) pending against, or to the
Knowledge of Acquirer or Sub threatened, against or affecting Acquirer, Sub or
any of their respective properties before any court or arbitrator or any
governmental body, agency or official that (i) if adversely determined against
Acquirer or Sub, would have a Material Adverse Effect or (ii) in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the Merger
or any of the other transactions contemplated by the Agreement.
(h) TAXES.
Acquirer and Sub have timely filed (or has had timely filed on its
behalf) with the appropriate tax authorities all tax returns required to be
filed by them or on behalf of them, and each such tax return was complete and
accurate in all material respects, and each of Acquirer and Sub have timely
paid (or have had paid on their behalf) all material Taxes due and owing by
it, regardless of whether required to be shown or reported on a tax return,
including Taxes required to be withheld by it. No deficiency for a material
Tax has been asserted in writing or otherwise, to Acquirer's Knowledge,
against Acquirer or any subsidiary or with respect to any assets, except for
asserted deficiencies that either (i) have been resolved and paid in full or
(ii) are being contested in good faith. There are no material liens for Taxes
upon the assets of Acquirer or Sub.
(i) COMPLIANCE WITH LAWS.
To the Knowledge of Acquirer and Sub, neither Acquirer nor Sub is
in violation of, nor has either Acquirer or Sub violated, any applicable
provisions of any laws, statutes, ordinances or regulations, other than as
would not be reasonably likely to have a Material Adverse Effect or constitute
a felony.
(j) ENVIRONMENTAL MATTERS.
Except for such matters that, individually or in the aggregate,
are not reasonably likely to have a Material Adverse Effect, Acquirer (i) has
obtained all applicable permits, licenses and other authorizations that are
required to be obtained under all applicable Environmental Laws by Acquirer in
connection with its business; (ii) is in compliance with all terms and
conditions of such required permits, licenses and authorizations, and with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in or arising
from applicable Environmental Laws in connection with its business; (iii) has
not received notice of any part or present violations of Environmental Laws in
connection with its business, or of any spill, release, event, incident,
condition or action or failure to act in connection with its business that is
reasonably likely to prevent continued compliance with such Environmental
Laws, or which would give rise to any common law environmental liability or
liability under Environmental Laws, or which would otherwise form the basis of
any action against Acquirer based on or resulting from the manufacture,
processing, use, treatment, storage, disposal, transport, or handling, or the
emission, discharge or release into the environment, of any hazardous material
by any Person in connection with Acquirer's business; and (iv) has taken all
actions required under applicable Environmental Laws to register any products
or materials required to be registered by Acquirer thereunder in connection
with its business.
(k) INSURANCE.
Acquirer does not maintain any insurance covering its assets,
business, equipment, properties, operations, employees, officers, directors
and managers.
(l) ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as set forth on Schedule 4.2(l) or as otherwise
contemplated by this Agreement, since the date of the most recent financial
statements contained in the Acquirer SEC Documents (i) there has been no
change or development in, or effect on, Acquirer that has or could reasonably
be expected to have a Material Adverse Effect, (ii) Acquirer has not sold,
transferred, disposed of, or agreed to sell, transfer or dispose of, any
material amount of its assets other than in the ordinary course of business,
(iii) Acquirer has not paid any dividends or distributed any of its assets to
any of its shareholders, (iv) Acquirer has not acquired any material amount of
assets except in the ordinary course of business, nor acquired or merged with
any other business, (v) Acquirer has not waived or amended any of its
respective material contractual rights except in the ordinary course of
business, and (vi) Acquirer has not entered into any agreement to take any
action described in clauses (i) through (v) above.
(m) ADVISORY FEES.
There is no investment banker, broker, finder or other advisor
which has been retained by, or is authorized by Acquirer or Sub to act on its
or their behalf, who might be entitled to any fee or commission from RE3W,
Acquirer, Sub or any of their respective Affiliates upon consummation of this
Merger.
(n) STATEMENTS AND OTHER DOCUMENTS NOT MISLEADING.
Neither this Agreement, including all exhibits and schedules and
other closing documents, nor any document filed with the SEC pursuant to
Acquirer's reporting obligations under the Exchange Act, nor any other
financial statement, document or other instrument heretofore or hereafter
furnished by Acquirer or Sub to RE3W in connection with the Merger or the
other transactions contemplated hereby, or any information furnished by
Acquirer or Sub taken as a whole contains or will contain any untrue statement
of any material fact or omit or will omit to state any material fact required
to be stated in order to make such statement, information, document or other
instruments, in light of the circumstances in which they are made, not
misleading. There is no fact known to Acquirer or Sub taken as a whole which
may have a Material Adverse Effect on the business, prospects, financial
condition or results of operations of Acquirer or Sub taken as a whole or of
any of their respective properties or assets which has not been set forth in
this Agreement as an exhibit or schedule hereto.
ARTICLE V
AGREEMENTS OF THE PARTIES
5.1 ACCESS TO INFORMATION.
At all times prior to the Closing or the earlier termination of
this Agreement in accordance with the provisions of Section 8, and in each
case subject to Section 5.2 below, each of the parties hereto shall provide to
the other parties (and the other parties' authorized representatives) full
access during normal business hours and upon reasonable prior notice to the
premises, properties, books, records, assets, liabilities, operations,
contracts, personnel, financial information and other data and information of
or relating to such party (including without limitation all written
proprietary and trade secret information and documents, and other written
information and documents relating to intellectual property rights and
matters), and will cooperate with the other party in conducting its due
diligence investigation of such party.
5.2 CONFIDENTIALITY; NO SOLICITATION.
(a) CONFIDENTIALITY OF RE3W-RELATED INFORMATION.
With respect to information concerning RE3W that is made available
to Acquirer pursuant to the terms of this Agreement, Acquirer and Sub agree
that they shall hold such information in strict confidence, shall not use such
information except for the sole purpose of evaluating the Merger and related
transactions contemplated in this Agreement and shall not disseminate or
disclose any of such information other than to their directors, officers,
employees, shareholders, Affiliates, agents and representatives who need to
know such information for the sole purpose of evaluating the Merger and the
related transactions (each of whom shall be informed in writing by Acquirer or
Sub of the confidential nature of such information and directed by Acquirer or
Sub in writing to treat such information confidentially). Acquirer shall not
reverse engineer, decompile or disassemble the object code of any of RE3W's
software applications. If this Agreement is terminated pursuant to the
provisions of Section 8, Acquirer or Sub shall immediately return all such
information, all copies thereof and all information prepared by Acquirer or
Sub based upon the same. The above limitations on use, dissemination and
disclosure shall not apply to information that (i) is learned by Acquirer or
Sub from a third party entitled to disclose it; (ii) becomes known publicly
other than through Acquirer, Sub or any party who received the same through
Acquirer or Sub, provided that Acquirer or Sub have no Knowledge that the
disclosing party was subject to an obligation of confidentiality; (iii) is
required by law or court order to be disclosed by Acquirer or Sub; or (iv) is
disclosed with the express prior written consent thereto of RE3W. Acquirer and
Sub shall undertake all necessary steps to ensure that the secrecy and
confidentiality of such information will be maintained in accordance with the
provisions of this Section 5.2(a). Notwithstanding anything contained herein
to the contrary, in the event a party is required by court order or subpoena
to disclose information which is otherwise deemed to be confidential or
subject to the confidentiality obligations hereunder, prior to such
disclosure, the disclosing party shall: (A) promptly notify the non-disclosing
party and, if having received a court order or subpoena, deliver a copy of the
same to the non-disclosing party; (B) cooperate with the non-disclosing party,
at the expense of the non-disclosing party in, obtaining a protective or
similar order with respect to such information; and (C) provide only such of
the confidential information as the disclosing party is advised by its counsel
is necessary to strictly comply with such court order or subpoena.
(b) CONFIDENTIALITY OF ACQUIRER-RELATED INFORMATION.
With respect to information concerning Acquirer that is made
available to RE3W pursuant to the provisions of this Agreement, RE3W agrees
that it will hold such information in strict confidence, shall not use such
information except for the sole purpose of evaluating the Merger and the
related transactions, and shall not disseminate or disclose any of such
information other than to its directors, officers, employees, shareholders,
Affiliates, agents and representatives who need to know such information for
the sole purpose of evaluating the Merger and the related transactions (each
of whom shall be informed in writing by RE3W of the confidential nature of
such information and directed by such party in writing to treat such
information confidentially). If this Agreement is terminated pursuant to the
provisions of Section 8, RE3W agrees to return immediately all such
information, all copies thereof and all information prepared by it based upon
the same. The above limitations on use, dissemination and disclosure shall not
apply to information that (i) is learned by RE3W from a third party entitled
to disclose it; (ii) becomes known publicly other than through RE3W or any
party who received the same through RE3W, provided that RE3W has no Knowledge
that the disclosing party was subject to an obligation of confidentiality;
(iii) is required by law or court order to be disclosed by RE3W; or (iv) is
disclosed with the express prior written consent thereto of Acquirer. RE3W
agrees to undertake all necessary steps to ensure that the secrecy and
confidentiality of such information will be maintained in accordance with the
provisions of this paragraph (b). Notwithstanding anything contained herein to
the contrary, in the event a party is required by court order or subpoena to
disclose information which is otherwise deemed to be confidential or subject
to the confidentiality obligations hereunder, prior to such disclosure, the
disclosing party shall: (i) promptly notify the non-disclosing party and, if
having received a court order or subpoena, deliver a copy of the same to the
non-disclosing party; (ii) cooperate with the non-disclosing party at the
expense of the non-disclosing party in obtaining a protective or similar order
with respect to such information; and (iii) provide only such of the
confidential information as the disclosing party is advised by its counsel is
necessary to strictly comply with such court order or subpoena.
(c) NONDISCLOSURE.
Neither RE3W, nor Acquirer or Sub shall disclose to the public or
to any third party the existence of this Agreement or the transactions
contemplated hereby or any other material non-public information concerning or
relating to any other party hereto, other than with the express prior written
consent of the other parties hereto, except as may be required by law or court
order or to enforce the rights of such disclosing party under this Agreement,
in which event the contents of any proposed disclosure shall be discussed with
the other parties before release; provided, however, that notwithstanding
anything to the contrary contained in this Agreement, any party hereto may
disclose this Agreement to any of its directors, officers, employees,
shareholders, Affiliates, agents and representative who need to know such
information for the sole purpose of evaluating the Merger, and to any Person
whose consent is required in connection with the Merger or this Agreement. The
parties anticipate issuing a mutually acceptable, joint press release
announcing the execution of this Agreement and the consummation of the Merger.
(d) NO SOLICITATION.
In consideration of the substantial expenditure of time, effort
and money to be undertaken by Acquirer and RE3W in connection with the
transactions contemplated by this Agreement, neither RE3W or any of its
Affiliates on the one hand nor Acquirer, Sub or Acquirer Shareholders on the
other hand, will, prior to the Closing directly or indirectly, through any
officer, director, agent or otherwise: (i) solicit, initiate or encourage the
submission of inquiries, proposals or offers from any Person or entity
relating to any acquisition or purchase of assets of or any equity interest in
the other party or any Affiliate thereof or any tender offer (including a
self-tender offer), exchange offer, merger, consolidation, business
combination, sale of a substantial amount of assets or sale of securities,
liquidation, dissolution or similar transaction involving the other party or
its Affiliates (a "Transaction Proposal"); (b) enter into or participate in
any discussions or negotiations regarding a Transaction Proposal, or furnish
to any other Person or entity any information with respect to the business,
properties or assets of the other party or its Affiliates in connection with a
Transaction Proposal; or (c) otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage any effort or attempt by any other
Person to do or seek a Transaction Proposal.
5.3 INTERIM OPERATIONS.
During the period from the date of this Agreement and continuing
until the Closing:
(a) INTERIM OPERATIONS OF RE3W.
RE3W agrees (except as expressly contemplated by this Agreement,
including any Exhibits and Schedules hereto, or to the extent that Acquirer
shall otherwise consent in writing) that:
(i) ORDINARY COURSE. RE3W shall carry on its business in
the usual, regular and ordinary course of business in substantially the same
manner as heretofore conducted and, to the extent consistent with such
business, use all reasonable efforts to preserve intact their present business
organizations, keep available the services of their present officers and
employees and preserve their relationships with customers, suppliers and
others having business dealings with them;
(ii) DIVIDENDS; CHANGES IN STOCK. Except for the issuance
of Units pursuant to the Offering, RE3W shall not and shall not propose to (a)
declare, set aside or pay any dividend, on, or make other distributions in
respect of, any of its capital stock, (b) split, combine or reclassify any of
its capital stock or issue, authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock (c) redeem, repurchase or otherwise acquire any shares of RE3W
Capital Stock or (d) otherwise change its capitalization, except as provided
herein.
(iii) GOVERNING DOCUMENTS. RE3W shall adopt the Amended
Memorandum Articles and the same shall be in effect, without further amendment
as of the Closing.
(iv) NO DISPOSITIONS. RE3W shall not sell, lease, pledge,
encumber or otherwise dispose of or agree to sell, lease, pledge, encumber or
otherwise dispose of, any of its material assets except in the ordinary course
of business consistent with prior practice and in no event amounting in the
aggregate to more than $25,000 in value of such assets.
(v) INDEBTEDNESS. RE3W shall not incur any indebtedness
for borrowed money or guarantee any such indebtedness or issue or sell any
debt securities or guarantee any debt securities of others other than in the
ordinary course of business consistent with prior practice or as otherwise set
forth in Schedule 1.3(b).
(vi) RE3W, INC. TRANSACTIONS. RE3W will use its reasonable
best efforts to assist RE3W, Inc. in obtaining the cancellation of all
outstanding options to purchase shares of RE3W, Inc. capital stock and in
securing the participation of the holders of all of RE3W, Inc. outstanding
capital stock to become parties to the Contribution Agreement;
(vii) EXECUTIVE COMPENSATION. RE3W shall not request or
suggest to RE3W, Inc., that it grant any increase in compensation or in
severance or termination pay to, or enter into any new employment agreement
with, any executive officer who is serving both companies.
(viii) ACQUISITIONS. RE3W shall not acquire (by merger,
consolidation or acquisition of stock or assets or otherwise) any corporation,
partnership or other business organization or subdivision thereof, or make any
investment by either purchase of stock or securities, contributions to
capital, property transfer or, except in the ordinary course of business,
purchase of any property or assets, of any other individual or entity.
(ix) TAX ELECTIONS. RE3W shall not make any material tax
election or settle or compromise any material federal, state, local or foreign
tax liability.
(x) WAIVERS AND RELEASES. RE3W shall not waive, release,
grant or transfer any rights of material value or modify or change in any
material respect any material agreement of RE3W other than in the ordinary
course of business and consistent with past practice.
(xi) OTHER ACTIONS. Except for entering into an agreement
with RE3W. Inc., for the latter to provide an array of services for RE3W, RE3W
shall not enter into any agreement or arrangement to do any of the foregoing.
RE3W shall not take any action, or fail to take any action, that is reasonably
likely to result in any of the representations and warranties of RE3W set
forth in this Agreement becoming untrue in any material respect.
(b) INTERIM OPERATIONS OF ACQUIRER AND SUB.
Acquirer and Sub agree (except as expressly contemplated by this
Agreement, including any Exhibits and Schedules hereto, or to the extent that
RE3W shall otherwise consent) that:
(i) ORDINARY COURSE. Acquirer and Sub shall conduct no
business activity other than in connection with the transactions contemplated
by this Agreement.
(ii) DIVIDENDS; CHANGES IN STOCK. Except as contemplated
hereby or disclosed herein, neither Acquirer nor Sub shall (and neither shall
propose to) (a) declare or pay any dividend, on, or make other distributions
in respect of, any of its capital stock, (b) split, combine or reclassify any
of its capital stock or issue, authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, (c) repurchase or otherwise acquire any shares of its capital
stock or (d) otherwise change its capitalization.
(iii) ISSUANCE OF SECURITIES. Except as contemplated by
this Agreement, Acquirer shall not sell, issue, pledge, authorize or propose
the sale or issuance of, pledge or purchase or propose the purchase of, any
shares of its capital stock of any class or securities convertible into, or
rights, warrants or options to acquire, any such shares or other convertible
securities.
(iv) GOVERNING DOCUMENTS. Except as required to authorize
the Restated Articles, the Restated Bylaws and issuance of up to 6,000,000
shares of Series A Preferred Stock as described in the PPM, Acquirer and Sub
shall not amend their charter documents.
(v) NO DISPOSITIONS. Acquirer and Sub shall not sell,
lease, pledge, Encumber or otherwise dispose of or agree to sell, lease,
pledge, Encumber or otherwise dispose of, any material assets except in the
ordinary course of business consistent with prior practice and in no event
amounting in the aggregate to more than $5,000 in value of such assets.
(vi) INDEBTEDNESS. Except as contemplated by this
Agreement, Acquirer and Sub shall not incur any indebtedness for borrowed
money or guarantee any such indebtedness or issue or sell any debt securities
or guarantee any debt securities of others other than in the ordinary course
of business consistent with prior practice and in no event amounting in the
aggregate to more than $5,000.
(vii) EXECUTIVE COMPENSATION. Acquirer and Sub shall not
grant to any executive officer any increase in compensation or in severance or
termination pay from the arrangements that were in effect on December 31, 2005
and set forth in the SEC Documents, or enter into any employment agreement
with any executive officer.
(viii) ACQUISITIONS. Except as set forth in subsection (ix)
below, Acquirer and Sub shall not acquire (by merger, consolidation or
acquisition of stock or assets or otherwise) any corporation, partnership or
other business organization or subdivision thereof, or make any investment by
either purchase of stock or securities, contributions to capital, property
transfer or, except in the ordinary course of business, purchase of any
property or assets, of any other individual or entity.
(ix) CONTRIBUTION AGREEMENT. Acquirer will enter into the
Contribution Agreement with each registered holder of RE3W, Inc. capital stock
(the "Contributed Shares") and at the Closing will issue and exchange shares
of Acquirer Common Stock for the Contributed Shares as provided in the
Contribution Agreement.
(x) TAX ELECTIONS. Acquirer and Sub shall not make any
material tax election or settle or compromise any material federal, state,
local or foreign tax liability.
(xi) WAIVERS AND RELEASES. Acquirer and Sub shall not
waive, release, grant or transfer any rights of material value or modify or
change in any material respect any material agreement of either or both other
than in the ordinary course of business and consistent with past practice.
(xii) REGISTRATION RIGHTS. Acquirer will enter into a
registration rights agreement with the Acquirer Shareholders who execute and
deliver the Lock-Up/Leak-Out Agreement referenced in Section 5.4(c) to be
effective for shares of common stock they own following the Effective Time.
(xiii) OTHER ACTIONS. Acquirer and Sub shall not enter into
any agreement or arrangement to do any of the foregoing and shall not take any
action, or fail to take any action, that is reasonably likely to result in any
of its representations and warranties set forth in this Agreement becoming
untrue in any material respect.
5.4 ACQUIRER SHAREHOLDERS.
(a) ACTIONS BY ACQUIRER SHAREHOLDERS.
Acquirer Shareholders shall vote their shares in for approval of
(a) the Restated Articles as provided in Section 3.2(a) hereof, (b) the
Restated Bylaws as provided in Section 3.2(a) hereof, (c) the adoption of a
2006 Stock Option Plan as provided in Section 3.2(a) hereof and (d) any other
matter under this Agreement that RE3W and Acquirer mutually agree should be or
is required to be approved by the shareholders of Acquirer. Acquirer
Shareholders will not offer to sell, sell, agree to sell, grant an option to
purchase, or purchase any shares of Common Stock of Acquirer between the date
of this Agreement and the public announcement of this Agreement by Acquirer,
and then only in compliance with applicable state and federal securities
regulations.
(b) INDEMNIFICATION AGREEMENT.
Jenson Services, Inc., Travis T. Jenson and Thomas J. Howells
shall enter into an Indemnification Agreement with RE3W substantially in the
form of Exhibit 2.2(c)(i).
(c) LOCK UP/LEAK OUT AGREEMENTS.
The Acquirer Shareholders will enter into Lock Up/Leak Out
Agreements with Acquirer and RE3W in the form of Exhibit 5.4(c) hereto, to be
effective at the Effective Time
5.5 ALL REASONABLE EFFORTS.
Subject to the terms and conditions of this Agreement and to the
fiduciary duties and obligations of the boards of directors of the parties
hereto to their respective shareholders, as advised by their counsel, each of
the parties to this Agreement shall use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, or to
remove any injunctions or other impediments or delays, legal or otherwise, as
soon as reasonable practicable, to consummate the Merger and the other
transactions contemplated by this Agreement.
5.6 PUBLIC ANNOUNCEMENTS.
Acquirer, Sub and RE3W shall consult with each other before
issuing any press release or otherwise making any public statements with
respect to the Merger, this Agreement or the other transactions contemplated
by this Agreement and shall not issue any other press release or make any
other public statement without prior consent of the other parties, except as
may be required by law or, with respect to Acquirer, by obligations pursuant
to rule or regulation of the Exchange Act, the Securities Act, any rule or
regulation promulgated thereunder or any rule or regulation of the National
Association of Securities Dealers.
5.7 NOTIFICATION OF CERTAIN MATTERS.
RE3W shall give prompt notice to Acquirer, and Acquirer and Sub
shall give prompt notice to RE3W, of (a) the occurrence or non-occurrence of
any event, the occurrence or non-occurrence of which would cause any of their
respective representations or warranties in this Agreement to be untrue or
inaccurate in any material respect, as to RE3W, at or prior to the Closing,
and, as to Acquirer or Sub, as of the Closing and (b) any material failure of
RE3W, on the one hand, or Acquirer and Sub, on the other hand, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by them under this Agreement; provided, however,
the delivery of any notice pursuant to this Section shall not limit or
otherwise affect the remedies available to the party receiving such notice
under this Agreement as expressly provided in this Agreement.
5.8 EXPENSES.
All costs and expenses incurred in connection with the Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such expenses whether or not the Merger is consummated.
5.9 REVERSE STOCK SPLIT.
RE3W agrees that it will not approve or support any action or
proposal for a reverse split of Acquirer's outstanding common stock for a
period of one year following the Closing.
5.10 RESERVED.
5.11 ISSUANCE OF SERIES A PREFERRED STOCK.
On or before the Closing, Acquirer shall take all necessary action
to authorize the creation and issuance of not more than 6,000,000 shares of
Series A Preferred Stock to be issued to the holders of RE3W's Series E Shares
on a one for one basis.
5.12 PROHIBITION ON TRADING IN ACQUIRER SECURITIES.
RE3W acknowledges that the United States securities laws prohibit
any Person who has received material non-public information concerning the
matters which are the subject matter of this Agreement from purchasing or
selling the securities of the Acquirer, or from communicating such information
to any Person under circumstances in which it is reasonably foreseeable that
such Person is likely to purchase or sell securities of the Acquirer.
Accordingly, until such time as any such non-public information has been
adequately disseminated to the public, RE3W shall not purchase or sell any
securities of the Acquirer, or communicate such information to any other
Person. No Affiliate of RE3W will acquire any securities of Acquirer other
than pursuant to this Agreement until after the Effective Time.
5.13 BOARD OF DIRECTORS.
On or before the Closing, Acquirer's incumbent directors will
appoint Richard N. Frost and Rowland W. Day II as directors to fill existing
vacancies on Acquirer's Board. At the Closing Acquirer shall obtain letters of
resignation from Travis T. Jenson, Thomas J. Howells and Harold T. Jenson
constituting all of Acquirer's incumbent directors, and take all necessary
corporate action at the Closing, pursuant to the Restated Bylaws, to appoint
Bruce K. Akins, Stephen Hopkins and Parker S. Kennedy (the "RE3W DESIGNEES")
to serve as the directors of Acquirer, to be effective at the Effective Time.
5.14 ACKNOWLEDGMENT OF APPROVALS.
By virtue of their respective signatures to this Agreement,
Acquirer, Sub and RE3W acknowledge their approval of this Agreement and their
consent to the consummation of the transactions identified herein.
5.15 CLOSING FINANCIAL STATEMENTS.
Prior to Closing, RE3W will deliver the Financial Statements to
Acquirer in a form that will comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the
SEC with respect thereto.
5.16 FORM 8-K; OTHER FILINGS.
As promptly as practicable after the date of this Agreement,
Acquirer will prepare its current report on SEC Form 8-K (the "Form 8-K")
relating to the execution of this Agreement and any other matters required to
be disclosed therein. Following the Closing, Acquirer will, with RE3W's
cooperation, prepare and file a Form 8-K to be dated as of the Effective Time
and any other filings required to be filed by it under the Exchange Act, the
Securities Act or any other Federal, foreign or blue sky or related laws
relating to the Merger and the transactions contemplated by this Agreement
(the "Other Filings"). RE3W will promptly review the Other Filings and confirm
the accuracy of all matters contained therein that are based on written
disclosures made by RE3W. After obtaining consent of Acquirer and RE3W,
Acquirer will file the Form 8-K on the date of the Effective Time. After the
Effective Time, Acquirer will timely file all reports with the SEC, the stock
exchange or trading system on which the Acquirer's shares are listed or
quoted and such other governmental agencies as may require the filing of Other
Filings.
5.17 NOTICES FROM GOVERNMENTAL AGENCIES.
Acquirer will notify RE3W promptly upon the receipt of any
communication from the SEC or its staff or any other government officials
regarding the transactions contemplated by this Agreement and will provide
RE3W with copies of all correspondence between Acquirer or any of Acquirer's
representatives, on the one hand, and the SEC or its staff or any other
government officials, on the other hand, with respect to the transactions
contemplated hereby. In addition, subject to applicable laws relating to the
exchange of information, each Party will promptly furnish to the other Parties
copies of written communications (and memoranda setting forth the substance of
all oral communications) received by such party, or any of its Affiliates,
from, or delivered by any of the foregoing to, any governmental or regulatory
authority, domestic or foreign, relating to or in respect of the transactions
contemplated under this Agreement.
5.18 PRODUCTION OF SCHEDULES AND EXHIBITS.
Each of the parties hereto shall utilize its reasonable best
efforts to produce all Schedules and Exhibits required to be produced by it
under this Agreement at or within a reasonable time after the execution
hereof. In the event that any party has not produced all Schedules and
Exhibits required to be produced by it hereunder prior to the execution of
this Agreement, unless otherwise provided herein, all such Schedules and
Exhibits shall be produced by such party not later than three (3) Business
Days prior to the Closing. The Schedules and Exhibits produced subsequent to
the execution of this Agreement, shall be given such force and effect as
though such Schedules and Exhibits which were produced upon execution of this
Agreement.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
6.1 CONDITIONS TO OBLIGATIONS OF RE3W.
The obligations of RE3W to consummate the Merger and the other
transactions contemplated to be consummated by them at the Closing are subject
to the satisfaction (or waiver by RE3W) at or prior to the Closing (or at such
other time prior thereto as may be expressly provided in this Agreement) of
each of the following conditions:
(a) The representations and warranties of Acquirer and Sub set
out in this Agreement shall be true and correct in all material respects at
and as of the time of the Closing as though such representations and
warranties were made at and as of such time;
(b) Acquirer shall have complied in a timely manner and in all
material respects with the respective covenants and agreements set out in this
Agreement;
(c) The Merger shall have been approved by RE3W's directors and
by its shareholders as provided in its Articles and in accordance with the
Act;
(d) The Merger shall have been approved by Sub in accordance
with the provisions of the NRS. The Board of Directors of Sub and Acquirer
shall have approved the execution of this Agreement and the Merger thereby;
(e) Holders of a majority of Acquirer's outstanding shares
(including the Acquirer Shareholders) shall have approved i) the 2006 Stock
Option Plan in the form of Exhibit 2.2(b)(xvii), ii) the Restated Articles in
the form of Exhibit 2.2(b)(xii)(a), iii) the Restated Bylaws of Acquirer in
the form of Exhibit 2.2(b)(xii)(b), and iv) a Certificate of Designations of
Rights, Preferences and Privileges of Acquirer's Series A Preferred Stock in
the form of Exhibit 6.1(d) hereto;
(f) Contributed Shares representing all of the outstanding
shares of capital stock of RE3W, Inc., shall have been delivered to Acquirer
by the holders thereof pursuant to the Contribution Agreement, endorsed for
transfer to Acquirer and Acquirer has prepared for issuance and delivery to
the contributing holders at the Closing shares of Acquirer's Common Stock in
the amounts provided for in the Contribution Agreement;
(g) A minimum of 640,000 Units shall have been sold to
Accredited Investors through the Offering and proceeds from such sales shall
be available to RE3W upon Closing;
(h) There shall be delivered to RE3W an officer's certificate of
Acquirer to the effect that all of the representations and warranties of
Acquirer set forth herein are true and correct in all material respects as of
the Closing, and the Acquirer has complied in all material respects with the
covenants and agreements set forth herein that are required to be complied
with by the Closing;
(i) All of the Persons who Acquirer designated to sign and
deliver a Lock-Up/Leak-Out Agreement with Acquirer and RE3W shall have entered
into said agreement;
(j) There shall be delivered to RE3W an officer's certificate of
Sub to the effect that all of the representations and warranties of Sub set
forth herein are true and complete in all material respects as of the Closing,
and Sub has complied in all material respects with the covenants and
agreements set forth herein that are required to be complied with by the
Closing;
(k) Acquirer, Sub or the Acquirer Shareholders shall have
fulfilled all of their respective obligations hereunder;
(l) All director, shareholder, lender, lessor and other parties'
consents and approvals, as well as all filings with, and all necessary
consents or approvals of, all federal, state and local governmental
authorities and agencies, as are required under this Agreement, applicable law
or any applicable contract or agreement (other than as contemplated by this
Agreement) to complete the Merger shall have been secured; and
(m) No statute, rule, regulation, executive order, decree,
injunction or restraining order shall have been enacted, entered, promulgated
or enforced by any court of competent jurisdiction or governmental authority
that prohibits or restricts the consummation of the Merger or the related
transactions.
6.2 CONDITIONS TO ACQUIRER'S AND SUB'S OBLIGATIONS.
The obligations of Acquirer and Sub to consummate the Merger and
the other transactions contemplated to be consummated by them at the Closing
are subject to the satisfaction (or waiver by Acquirer and Sub) at or prior to
the Closing (or at such other time prior thereto as may be expressly provided
in this Agreement) of each of the following conditions:
(a) The representations and warranties of RE3W set out in this
Agreement shall be true and correct in all material respects at and as of the
time of the Closing as though such representations and warranties were made at
and as of such time;
(b) RE3W shall have complied in a timely manner and in all
material respects with its covenants and agreements set out in this Agreement;
(c) There shall be delivered to Acquirer an officer's
certificate of RE3W to the effect that all of the representations and
warranties of RE3W set forth herein are true and correct in all material
respects as of the Closing, and that RE3W has complied in all material
respects with covenants and agreements set forth herein required to be
complied with by the Closing;
(d) The Board of Directors of RE3W shall have approved the
Merger in accordance with the BVI laws;
(e) RE3W shall have secured approval of the Merger from the
holders of a majority of the Common Shares, the RE3W Preferred Stock and the
Series E Shares, each voting as a separate class, by vote or by written
consent;
(f) A minimum of 640,000 Units shall have been sold to
Accredited Investors through the Offering and proceeds from such sales shall
be available to RE3W upon Closing;
(g) All deliveries that are required to be made by RE3W and the
holders of RE3W Securities pursuant to Section 1.2 of this Agreement have been
made, as required;
(h) RE3W shall have fulfilled all of its obligations hereunder;
(i) All director, lender, lessor, additional shareholder, and
other parties' consents and approvals, as well as all filings with, and all
necessary consents or approvals of, all federal, state and local governmental
authorities and agencies, as are required under this Agreement, applicable law
or any applicable contract or agreement (other than as contemplated by this
Agreement) to complete the Merger shall have been secured; and
(j) No statute, rule, regulation, executive order, decree,
injunction or restraining order shall have been enacted, entered, promulgated
or enforced by any court of competent jurisdiction or governmental authority
that prohibits or restricts the consummation of the Merger or the related
transactions.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION BY THE ACQUIRER AND RE3W.
From and after the Closing Date, each of the Acquirer and RE3W
shall indemnify and hold harmless each other and their respective officers,
directors and shareholders (each an "Indemnified Party"), from and against any
and all demands, claims, actions or causes of action, judgments, assessments,
losses, liabilities, damages or penalties and reasonable attorneys' fees and
related disbursements (collectively, "Claims") suffered by such Indemnified
Party resulting from or arising out of (i) any inaccuracy in or breach of any
of the representations or warranties made by RE3W or Acquirer (individually
and on behalf of the Sub) at the time they were made, and, except for
representations and warranties that speak as of a specific date or time (which
need only be true and correct as of such date or time), on and as of the
Closing Date, (ii) any breach or nonfulfillment of any covenants or agreements
made by RE3W or Acquirer (individually or on behalf of the Sub), and (iii) any
misrepresentation made by RE3W or Acquirer (individually or on behalf of the
Sub), in each case as made herein or in the Schedules or Exhibits annexed
hereto or in any closing certificate, schedule or any ancillary certificates
or other documents or instruments furnished by RE3W or the Acquirer
(individually or on behalf of the Sub) pursuant hereto or in connection with
the Merger.
7.2 INDEMNIFICATION PROCEDURES FOR THIRD-PARTY CLAIM.
(a) Upon obtaining knowledge of any Claim by a third party which
has given rise to, or is expected to give rise to, a claim for indemnification
hereunder, an Indemnified Party shall give written notice ("Notice of Claim")
of such claim or demand to the other party (the "Indemnifying Party"),
specifying in reasonable detail such information as the Indemnified Party may
have with respect to such indemnification claim (including copies of any
summons, complaint or other pleading which may have been served on it and any
written claim, demand, invoice, billing or other document evidencing or
asserting the same). Subject to the limitations set forth in Section 7.2(b)
hereof, no failure or delay by an Indemnified Party in the performance of the
foregoing shall reduce or otherwise affect the obligation of the Indemnifying
Party to indemnify and hold the Indemnified Party harmless, except to the
extent that such failure or delay shall have actually adversely affected the
Indemnifying Party's ability to defend against, settle or satisfy any Claims
for which the Indemnified Party is entitled to indemnification hereunder.
(b) If the claim or demand set forth in the Notice of Claim
given by an Indemnified Party pursuant to Section 7.2(a) hereof is a claim or
demand asserted by a third party, the Indemnifying Party shall have fifteen
(15) days after the date on which Notice of Claim is given to notify
Indemnified Party in writing of its election to defend such third party claim
or demand on behalf of the Indemnified Party. If the Indemnifying Party elects
to defend such third party claim or demand, Indemnified Party shall make
available to the Indemnifying Party and its agents and representatives all
records and other materials that are reasonably required in the defense of
such third party claim or demand and shall otherwise cooperate with, and
assist the Indemnifying Party in the defense of, such third party claim or
demand, and so long as the Indemnifying Party is defending such third party
claim in good faith, the Indemnified Party shall not pay, settle or compromise
such third party claim or demand. If the Indemnifying Party elects to defend
such third party claim or demand, the Indemnified Party shall have the right
to participate in the defense of such third party claim or demand, at such
Indemnified Party's own expense. In the event, however, that such Indemnified
Party reasonably determines that representation by counsel to the Indemnifying
Party of both the Indemnifying Party and such Indemnified Party could
reasonably be expected to present counsel with a conflict of interest, then
the Indemnified Party may employ separate counsel to represent or defend it in
any such action or proceeding and the Indemnifying Party will pay the fees and
expenses of such counsel. If the Indemnifying Party does not elect to defend
such third party claim or demand or does not defend such third party claim or
demand in good faith, the Indemnified Party shall have the right, in addition
to any other right or remedy it may have hereunder, at the Indemnifying
Party's expense, to defend such third party claim or demand; provided,
however, that (i) such Indemnified Party shall not have any obligation to
participate in the defense of, or defend, any such third party claim or
demand; (ii) such Indemnified Party's defense of or its participation in the
defense of any such third party claim or demand shall not in any way diminish
or lessen the obligations of the Indemnifying Party under the agreements of
indemnification set forth in this Article VII; and (iii) such Indemnified
Party may not settle any claim without the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld or delayed.
(c) All Indemnified Parties, if any, shall cooperate fully in
all aspects of any investigation, defense, pre-trial activities, trial,
compromise, settlement or discharge of any claim in respect of which indemnity
is sought pursuant to this Article VII, including, but not limited to, by
providing the other party with reasonable access to employees and officers
(including as witnesses) and other information.
(d) Except for third party claims being defended in good faith,
the Indemnifying Party shall satisfy its obligations under this Article VII in
respect of a valid claim for indemnification hereunder in cash within ninety
(90) days after the date on which Notice of Claim is given.
7.3 INDEMNIFICATION PROCEDURES FOR NON-THIRD PARTY CLAIMS.
In the event any Indemnified Party should have an indemnification
claim against the Indemnifying Party under this Agreement that does not
involve a claim by a third party, the Indemnified Party shall promptly deliver
notice of such claim to the Indemnifying Party in writing and in reasonable
detail. The failure by any Indemnified Party to so notify the Indemnifying
Party shall not relieve the Indemnifying Party from any liability that it may
have to such Indemnified Party, except to the extent that the Indemnifying
Party has been actually prejudiced by such failure. If the Indemnifying Party
does not notify the Indemnified Party within fifteen (15) Business Days
following its receipt of such notice that the Indemnifying Party disputes such
claim, such claim specified by the Indemnifying Party in such notice shall be
conclusively deemed a liability of the Indemnifying Party under this Article
VII and the Indemnifying Party shall pay the amount of such liability to the
Indemnified Party on demand, or in the case of any notice in which the amount
of the claim is estimated, on such later date when the amount of such claim is
finally determined. If the Indemnifying Party disputes its liability with
respect to such claim in a timely manner, Indemnifying Party and the
Indemnified Party shall proceed in good faith to negotiate a resolution of
such dispute and, if not resolved through negotiations, such dispute shall be
submitted to arbitration pursuant to Section 9.9.
7.4 LIMITATIONS ON INDEMNIFICATION.
No claim for indemnification under this Article VII shall be
asserted by, and no liability for such indemnification shall be enforced
against, the Indemnifying Party to the extent the Indemnified Party has
theretofore received indemnification or otherwise been compensated for such
Claim. In the event that an Indemnified Party shall later collect any such
amounts recovered under insurance policies with respect to any Claim for which
it has previously received payments under this Article VII from the
Indemnifying Party, such Indemnified Party shall promptly repay to the
Indemnifying Party such amount recovered.
7.5 EXCLUSIVE REMEDY.
The indemnification provisions of this Article VII shall be the
exclusive remedy following the Closing with respect to breaches thereof by an
Indemnifying Party and shall be limited as provided in Section 9.2. The
obligations of the parties set forth in this Article VII shall be conditioned
upon the Closing having occurred.
ARTICLE VIII
TERMINATION
8.1 TERMINATION.
This Agreement may be terminated and the Merger may be abandoned
at any time prior to or at the Closing:
(a) by mutual written consent of Acquirer, Sub and RE3W;
(b) by any of Acquirer, Sub or RE3W:
(i) if the Closing shall not have occurred on or before
September 30, 2006, unless otherwise extended in writing by all of the parties
hereto; provided, however, that the right to terminate this Agreement under
this Section 8.1(b)(i) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Closing to occur on or before that date; or
(ii) if any court of competent jurisdiction, or any
governmental body, regulatory or administrative agency or commission having
appropriate jurisdiction shall have issued an order, decree or filing or taken
any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling or
other action shall have become final and non-appealable;
(c) by RE3W if any of the conditions specified in Section 6.1
have not been met or if satisfaction of such a condition is or becomes
impossible (other than through the failure of RE3W to comply with its
respective obligations under this Agreement) and RE3W has not waived such
conditions on or before the Closing; or
(d) by Acquirer if any of the conditions specified in Section
6.2 have not been met or if satisfaction of such a condition is or becomes
impossible (other than through the failure of Acquirer or Sub to comply with
their respective obligations under this Agreement) and Acquirer or Sub has not
waived such condition on or before the Closing.
8.2 NOTICE AND EFFECT OF TERMINATION.
In the event of the termination and abandonment of this Agreement
pursuant to Section 8.1, written notice thereof shall forthwith be given to
the other party or parties specifying the provision pursuant to which such
termination is made. Upon termination, this Agreement shall forthwith become
void and all obligations of the parties under this Agreement will terminate
without any liability on the part of any party or its directors, officers or
shareholders and none of the parties shall have any claim or action against
any other party, except that the provisions of this Section 8.2 and Sections
5.2, 5.6 and 5.8, shall survive any termination of this Agreement. Nothing
contained in this Section 8.2 shall relieve any party, including the Acquirer
Shareholders, from any liability for any breach of this Agreement other than
in the event of a termination pursuant to Section 8.1(a).
8.3 EXTENSION; WAIVER.
Any time prior to the Closing, the parties may (a) extend the time
for the performance of any of the obligations or other acts of any other party
under or relating to this Agreement; (b) waive any inaccuracies in the
representations or warranties by any other party or (c) waive compliance with
any of the agreements of any other party or with any conditions to its own
obligations. Any agreement on the part of any other party to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
8.4 AMENDMENT AND MODIFICATION.
This Agreement may be amended by written agreement of Acquirer,
Sub and RE3W and the Acquirer Shareholders.
ARTICLE IX
MISCELLANEOUS
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; REMEDIES.
All representations and warranties contained in or made pursuant
to this Agreement or in any agreement, certificate, document or statement
delivered pursuant hereto shall survive the Closing for a period of twelve
months from the Closing Date, unless otherwise specified in such agreement,
certificate or document; provided, however, that notwithstanding the
foregoing, the representations and warranties set forth in Sections 4.1(a),
(b), (d), (e), (g), (i) and (l) and Sections 4.2(a), (b), (d), (e) and (g) and
all covenants and agreements of the parties relating to the subject matter(s)
thereof shall survive the Closing without such applicable limitation. The
right to indemnification, payment of damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected
by any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the
accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.
The rights and remedies of the parties to this Agreement are
cumulative, not alternative. In addition to their respective rights to damages
or other remedies they may have, and without limitation thereof, each of
Acquirer and RE3W shall have the right to obtain injunctive relief to restrain
any breach or otherwise to specifically enforce the provisions of this
Agreement, it being agreed by the parties that money damages alone would be
inadequate to compensate Acquirer or RE3W, as the case may be, for such breach
or other failure to perform such party's obligations under this Agreement.
9.2 LIMITATIONS ON LIABILITY
No party to this agreement shall be liable to any other party for
breach of its respective representations and warranties in Article 4, unless
and until the aggregate amount of all claims exceeds $25,000 (the
"Deductible"), and then only to the extent of amounts in excess of the
Deductible. Further, in no event shall any party's liability for breach of its
respective representations and warranties in Article 4 exceed $100,000.
9.3 NOTICES.
All notices requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given on the date if delivered personally,
or upon the second Business Day after it shall have been deposited by
certified or registered mail with postage prepaid, or sent by telex, telegram
or telecopier, as follows (or at such other address or facsimile number for a
party as shall be specified by like notice):
IF TO RE3W: RE3W WORLDWIDE LIMITED
C/o RE3W, Inc.
201 E. Sandpointe Avenue, Suite 320
Santa Ana, CA, 92707
Telephone: (714) 565-7370
Facsimile: (714) 565-7373
WITH A COPY TO: Dale S. Miller, Esq.
Jack Goldman, Esq.
Stephan, Oringher, Richman,
Theodora & Miller P.C.
2029 Century Park East, 6th Floor
Los Angeles, CA 90067
Telephone: (310) 557-2009
Facsimile: (310) 551-0283
IF TO ACQUIRER OR SUB: TC X Calibur, Inc.
4685 S. Highland Drive, Suite 202
Salt Lake City, Utah 84117
Attention: Travis T. Jenson, President
Telephone: (801) 278-9424
Facsimile: (801) 278-9290
WITH A COPY TO: Leonard W. Burningham, Esq.
455 East 500 South Street, Suite 205
Salt Lake City, Utah 84111
Facsimile: (801) 355-7126
9.4 AGREEMENT; ASSIGNMENT.
This Agreement, including all Exhibits and Schedules hereto,
constitutes the entire Agreement among the parties with respect to its subject
matter and supersedes all prior agreements and understandings, both written
and oral, among the parties or any of them with respect to such subject matter
and shall not be assigned by operation of law or otherwise.
9.5 BINDING EFFECT; BENEFIT.
This Agreement shall inure to the benefit of and be binding upon
the parties and their respective successors and assigns. Nothing in this
Agreement is intended to confer on any Person other than the parties to this
Agreement or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
9.6 HEADINGS.
The descriptive headings of the sections of this Agreement are
inserted for convenience only, do not constitute a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement.
9.7 COUNTERPARTS.
This Agreement may be executed in two or more counterparts and
delivered via facsimile, each of which shall be deemed to be an original, and
all of which together shall be deemed to be one and the same instrument.
9.8 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance
with the laws of the State of California, except to the extent that the NRS
shall apply to the internal corporate governance of the Acquirer and Sub and
that the Act shall apply to the internal corporate governance of RE3W, without
regard to the laws that might otherwise govern under principles of conflicts
of laws applicable thereto. The Merger shall be effective as provided by the
laws of the British Virgin Islands.
9.9 ARBITRATION.
If a dispute arises as to the interpretation of this Agreement, it
shall be decided finally in an arbitration proceeding conforming to the Rules
of the American Arbitration Association applicable to commercial arbitration
then in effect at the time of the dispute. The arbitration shall take place in
Los Angeles, California. The decision of the Arbitrators shall be conclusively
binding upon the parties and final, and such decision shall be enforceable as
a judgment in any court of competent jurisdiction. The parties shall share
equally the costs of the arbitration.
9.10 SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid,
void, unenforceable or against its regulatory policy, the remainder of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
9.11 CERTAIN DEFINITIONS.
As used herein:
(a) "AFFILIATE" shall have the meanings ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act;
(b) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which federally chartered financial institutions are not
open for business in the City of Philadelphia, Pennsylvania;
(c) "ENCUMBRANCES" shall mean any security or other property
interest or right, claim, lien, pledge, option, charge, security interest,
contingent or conditional sale, or other title claim or retention agreement,
interest or other right or claim of third parties, whether perfected or not
perfected, voluntarily incurred or arising by operation of law, and including
any agreement to grant or submit to any of the foregoing in the future;
(d) "ENVIRONMENTAL LAW" shall mean any applicable statute, rule,
regulation, law, bylaw, ordinance or directive of any nation or government,
any state, municipality or other political subdivision thereof and any entity,
body, agency, commission or court, whether domestic, foreign or multinational,
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any executive official thereof,
dealing with the pollution or protection of natural resources or the indoor or
ambient environment or with the protection of human health or safety;
(e) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended;
(f) "KNOWLEDGE" means an individual will be deemed to have
"Knowledge" of a particular fact or other matter if:
(i) such individual is actually aware of such fact or
other matter; or a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning the existence
of such fact or other matter.
(ii) A Person (other than an individual) will be deemed to
have "Knowledge" of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or at
any time had, Knowledge of such fact or other matter;
(g) "MATERIAL ADVERSE EFFECT" shall mean any adverse effect on
the business, condition (financial or otherwise) or results of operation of
the relevant party and its subsidiaries, if any, which is material to such
party and its subsidiaries, if any, taken as a whole;
(h) "PERSON" means any individual, corporation, partnership,
association, trust or other entity or organization, including a governmental
or political subdivision or any agency or institution thereof;
(i) "RIGHTS" shall mean any and all outstanding subscriptions,
warrants, options, voting agreements, voting trusts, proxies, or other
arrangements or commitments obligating or which may obligate a Person to
dispose of or vote any shares;
(j) "SOFTWARE" means computer software, programs and databases
in any form, including Internet web sites, web content and links, source code,
object code, operating systems and specifications, data, databases, database
management code, utilities, graphical user interfaces, menus, images, icons,
forms, methods of processing, software engines, platforms, and data formats,
all versions, updates, corrections, enhancements and modifications thereof,
and all related documentation, developer notes, comments and annotations;
(k) "TAXES" shall mean all taxes (whether U.S. federal, state,
local or non-U.S.) based upon or measured by income and any other tax
whatsoever, including, without limitation, gross receipts, profits, sales,
levies, imposts, deductions, charges, rates, duties, use, occupation, value
added, ad valorem, transfer, franchise, withholding, payroll and social
security, employment, excise, stamp duty or property taxes, together with any
interest, penalties, charges or fees imposed with respect thereto.
IN WITNESS WHEREOF, Acquirer, Sub, RE3W and the Acquirer Shareholders
have caused this Agreement to be signed individually or by their respective
officers hereunto duly authorized, all as of the date first written above.
ACQUIRER: TC X Calibur, Inc.,
a Nevada corporation
By: /s/ Travis Jenson
-----------------
Name: Travis Jenson
Its: President
SUB: TCX Acquisition Corp.,
a Nevada corporation and wholly-
owned subsidiary of Acquirer
By: /s/ Travis Jenson
-----------------
Name: Travis Jenson
Its: President
RE3W: RE3W Worldwide Limited,
a British Virgin Islands
By: /s/ Richard M. Frost
--------------------
Name Richard M. Frost
ACQUIRER SHAREHOLDERS: Jenson Services, Inc.
By: /s/ Travis Jenson
-----------------
Name: Travis Jenson
Its: President
/s/ Duane S. Jenson
-------------------
Duane S. Jenson
/s/ Travis T. Jenson
--------------------
Travis T. Jenson
/s/ Thomas J. Howells
---------------------
Thomas J. Howells
The following exhibits and schedules to the Agreement and Plan of
Merger have been omitted:
Exhibit Description
[To Be Completed]
[This needs to be completed]
Schedule Schedule Description
-------- --------------------
1
2 Blank
3 RE3W Security Holders
4 Articles of Association and Bylaws of RE3W
5 Consents
6 RE3W Financial Statements
20 Absence of Certain Changes or Events
21 Certificate of Incorporation and Bylaws of Sub
22 Issuances of Securities
23
The Company agrees to furnish supplementally a copy of the foregoing omitted
exhibits and schedules to the Securities and Exchange Commission upon request.
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER 1
1.1 THE MERGER 1
1.2 CONVERSION OF SECURITIES 3
1.3 MERGER CONSIDERATION 6
1.4 ADDITIONAL RIGHTS; TAKING OF NECESSARY ACTION; FURTHER ACTION 6
ARTICLE II THE CLOSING 7
2.1 CLOSING DATE 7
2.2 CLOSING TRANSACTIONS 7
ARTICLE III CERTAIN CORPORATE ACTION 11
3.1 RE3W CORPORATE ACTION; RE3W SHAREHOLDER CONSENT 11
3.2 ACQUIRER AND SUB CORPORATE ACTION; ACQUIRER SHAREHOLDER CONSENT 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES 11
4.1 REPRESENTATIONS AND WARRANTIES OF RE3W 11
4.2 REPRESENTATIONS AND WARRANTIES OF ACQUIRER AND SUB 15
ARTICLE V AGREEMENTS OF THE PARTIES 19
5.1 ACCESS TO INFORMATION 19
5.2 CONFIDENTIALITY; NO SOLICITATION 19
5.3 INTERIM OPERATIONS 21
5.4 ACQUIRER SHAREHOLDERS 24
5.5 ALL REASONABLE EFFORTS 25
5.6 PUBLIC ANNOUNCEMENTS 25
5.7 NOTIFICATION OF CERTAIN MATTERS 25
5.8 EXPENSES 26
5.9 REVERSE STOCK SPLIT 26
5.10 RESERVED 26
5.11 ISSUANCE OF SERIES A PREFERRED STOCK 26
5.12 PROHIBITION ON TRADING IN ACQUIRER SECURITIES 26
5.13 BOARD OF DIRECTORS 26
5.14 ACKNOWLEDGMENT OF APPROVALS 26
5.15 CLOSING FINANCIAL STATEMENTS 27
5.16 FORM 8-K; OTHER FILINGS 27
5.17 NOTICES FROM GOVERNMENTAL AGENCIES 27
5.18 PRODUCTION OF SCHEDULES AND EXHIBITS 27
ARTICLE VI CONDITIONS TO CONSUMMATION OF THE MERGER 28
6.1 CONDITIONS TO OBLIGATIONS OF RE3W 28
6.2 CONDITIONS TO ACQUIRER'S AND SUB'S OBLIGATIONS 30
ARTICLE VII INDEMNIFICATION 31
7.1 INDEMNIFICATION BY THE ACQUIRER AND RE3W 31
7.2 INDEMNIFICATION PROCEDURES FOR THIRD-PARTY CLAIM 32
7.3 INDEMNIFICATION PROCEDURES FOR NON-THIRD PARTY CLAIMS 33
7.4 LIMITATIONS ON INDEMNIFICATION 33
7.5 EXCLUSIVE REMEDY 34
ARTICLE VIII TERMINATION 34
8.1 TERMINATION 34
8.2 NOTICE AND EFFECT OF TERMINATION 34
8.3 EXTENSION; WAIVER 35
8.4 AMENDMENT AND MODIFICATION 35
ARTICLE IX MISCELLANEOUS 35
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; REMEDIES 35
9.2 LIMITATIONS ON LIABILITY 36
9.3 NOTICES 36
9.4 AGREEMENT; ASSIGNMENT 37
9.5 BINDING EFFECT; BENEFIT 37
9.6 HEADINGS 37
9.7 COUNTERPARTS 37
9.8 GOVERNING LAW 37
9.9 ARBITRATION 38
9.10 SEVERABILITY 38
9.11 CERTAIN DEFINITIONS 38